Trent Reznor Talks To Techdirt About His Unconventional New Record Deal, And Why He Still Loves DIY

from the not-everything-is-as-it-seems dept

Contrary to what you may have been hearing lately, Trent Reznor still thinks there's a big future in "do it yourself" efforts for musicians these days (and he expects to do it again at some point). And, no, he doesn't think that bands need a label. Nor did he go back to a major label because they wrote some huge check. It appears that there have been a lot of bogus stories floating around in response to the news that Trent Reznor signed a "major label" deal with Columbia Records (part of Sony Music) for his new band, How To Destroy Angels. As we pointed out at the time, there's nothing wrong with signing a major label deal, if you know what you're doing, why you're doing it -- and especially if you have some leverage. We fully expected that Reznor, given his earlier statements about the major labels, went into this situation with eyes wide open.

And, indeed, Reznor has now shared (exclusively, with Techdirt) that this is exactly the situation.

Last week, there was some press coverage over some comments that Reznor made, in an interview with David Byrne, that some have interpreted to mean that he felt you needed a major label to be successful today.

Seeing that story spread, Trent Reznor and his manager, Jim Guerinot, asked if I'd be interested in hearing the full story, rather than the "latest scandal" version. Reznor, Guerinot and I had a very long conversation late last week covering a variety of topics, which would be impossible to cover in a single post, but let's get to the highlights. First off, as expected, Reznor's deal is not the same sort of record deal a nobody off the street would sign these days. Guerinot made that clear:

It's a licensing arrangement. The deal that Trent is able to do at this stage of the game is different than what he would have been able to do at 19 years old coming into his first arrangement.... There are always different levels of accommodation and leverage that you're able to do. For Trent, fortunately, at this stage of the game, he's able to license it and continue to own his masters... and, really, that's the most relevant thing about the deal.

Guerinot went on to talk about how the real crime of most major label deals (and even some indie deals) is that the artists never get their masters back. They knew that any deal Reznor made would include him retaining the masters:

The toughest thing is when an artist takes an advance, pays back the advance, and doesn't own his masters. That's always been -- and I've argued this with my friends who run major labels -- that is the single greatest difficulty and why so many artists don't trust labels. At the end of the day, artists have paid 50% of every video that gets made -- it's recouped against an artist account. But they didn't benefit from the YouTube deal. They didn't benefit from the creation of Vevo, despite the fact that it's their money that went to creating that.

This was not a "typical" deal. So why do this particular deal? A few key reasons -- some of which (perhaps ironically) came about because of his previous success. Reznor pointed out that he has a huge fan base... for Nine Inch Nails. He was worried that those fans are the only ones who would pay attention -- and that they'd not necessarily appreciate How to Destroy Angels or (worse!) think that it's "just a side project with my wife." He specifically worried that NIN fans would say "this isn't what we want to hear," and that would then limit their ability to reach a wider audience. However, he thinks that HTDA is amazing and deserves to reach an audience way beyond his existing fans. In the end, it came down to figuring out what the band's goals were and they decided that they wanted to aim big, and try to reach as many fans as possible. And they weren't convinced they could do that on their own. Reznor explains:

The main reason I do what I do is I want to do something that matters. I want to be able to create art that reaches the maximum amount of people on my terms.... That was a key component... That was why we wound up considering, and ultimately going with, a label, and not just a label, but a major label, for How to Destroy Angels. Because it came down to us -- us being the band now -- sitting around and identifying what our goals were. And the top priority wasn't to make money. It was to try to reach the most amount of people, and try to reach the most amount of people effectively, that doesn't feel like it's coming completely from my backyard. Because I don't want this project, ultimately, to just be dismissed as "side project" or... (*loud sigh*) "patronizing affair with Trent and his wife." Sounds terrible, you know?

There really is something fascinating about the fact that, in some ways, his massive success and following because of NIN almost forced him back into a major label to try to get away from that same pigeon hole.

And, contrary to some of the buzz, they insist that the deal wasn't about someone writing a big check. They note that all of the advance money is either going into the recording or directly to marketing, and not into the band members' pockets.

Beyond the fact that Reznor and Guerinot could negotiate a much better deal, they also pointed out that a hell of a lot has changed at the major labels these days -- as those labels have been seriously humbled. They noted that it's been six years since Reznor was last signed to a major and plenty has happened since then. Guerinot pointed this out:

My experience as a manager who works with a label is that, what's happened with major labels over the past six years, with the attrition of business, and the lopping off of the top end of the business, and the bringing in a lot of younger people... we're just dealing with a lot of people with enthusiasm and excitement and ideas. It seems that the next wave of personnel that has come through these doors, does not have a sense of entitlement and position and stature. They feel like they have to justify their existence. And I've just been really excited working with them.

Reznor echoed similar feelings:

After thinking about it for a while, we thought some sort of label might have a benefit for us [in getting the word out beyond NIN's fans], or some sort of team that's able to work this thing, and present it like some of the other bands we'd like to be mentioned in the same breath as, it might infiltrate the consciousness of people through the same means.

So why go to a major label rather than just bringing in a team of your own or perhaps working with an indie label. Reznor offered up a few reasons, with part of it being that he didn't feel like "setting up his own label," even if it was just a temporary one for this release. Separately, they felt that -- given the specific goals with HTDA (again, to become as widely known as possible) -- the best people for that probably are still at the labels. They admit that it's opened up some useful doors, such as some artists to work with on remixes that they probably wouldn't have been able to get to otherwise. Also, as has been suggested repeatedly, they really wanted help internationally, and doing it themselves was really difficult. They noted how their UK distributor had gone bankrupt and taken all of their money not too long ago, and they didn't want to have to deal with that kind of thing again. Reznor, again, on the decision:

It didn't need to be a major label, but we have a good relationship with Mark Williams, who's our A&R guy at Columbia... and he introduced us to the team at Columbia, and the lean and mean system that they have there. That coupled with what seemed like a reasonable deal, felt like, 'hey, let's try it.' We're not locked to it indefinitely. Let's just see how it goes.

But does that mean that the new internet world is no good? Or that DIY doesn't make sense? Not at all. In fact, I think they spent more time in the conversation focusing on all the awesome things that can be done online today that weren't possible when Reznor was starting out. They think that, for many, many, many musicians today, there are amazing new opportunities to use these online tools to do amazing things, with or without a label. He did point out that the challenges facing artists today have certainly changed. In fact, echoing the exact sentiment we heard at our artists & entrepreneurs working group, the toughest thing today is the lack of an easy road map, a "logical progression" to a music career -- but there are still a lot more opportunities. Reznor again:

What I think is great right now, is that it is the wild west. As frustrating and worrisome as it can feel to hear that we're 'in-between business models' -- which we've been hearing for at least ten years now. So, okay, all the old rules go out the window, let's press reset, let's look at what assets we have now that one didn't have before. That's what the good news is. This is what David Byrne focuses on his book. The stranglehold of distribution, the cost of making records, all of that has changed....

My advice today, to established acts and new-coming acts, is the same advice I'd give to myself: pause for a minute, and really think about 'what is your goal? where do you see yourself?' When I was coming up, things weren't disrupted, and there was a logical progression.... As a 22-year-old kid in Cleveland, it seemed to me that just playing out in bars, hoping someone noticed your band, and then offered you a record contract, while that's possible, I didn't know anybody, and didn't know anybody who knew anybody that that had ever happened to. The strategy, then, was let's work on getting a band, and something that means something, music that matters, music that I feel proud of, and a vibe and name and 'brand' of this thing, and then try to reach maybe some small labels that had music in the same vein of what I liked. It didn't work exactly that way, but that type of archetype of a plan led me to focus my energies on the thing that did start, and that fuse got lit, and it wound up happening.

If I were that person today, there's a hell of a lot of things that didn't exist then, that exist now. Like, YouTube. Like the ability to self-publish. Like the ability to reach everyone in the world from your bedroom, if they're interested. And I'd focus my efforts on what seems like a logical way to do that, that maintains integrity. If my goal is to compete with Rihanna on the pop charts, I'd think that requires going through a major label system with a powerful manager. That game....

It all comes down to what is it that you want to do? I think indie self-publishing and do it yourself is great. I will certainly do it again. But it will be in the context of what I feel is right for me.

Guerinot added some more thoughts to that as well:

The beauty about today is, in the absence of [a major label being interested in a musician], the contemporary way that you can distribute allows you worldwide distribution. You can actually make that happen.... Now, you can be a tree falling in a forest, but there was a point in time where you just couldn't even do that. There was no way for someone to watch your video, buy your record, participate with you, in Australia, if you lived in Southern California. That wasn't available. Now, it's very nice that someone has said to Trent, 'hey, we'd like to do x, y and z on your behalf,' but they just as easily at some point in his career might not do that. I think it's amazing that the world accommodates the ability to do that.

They also took on the idea that the "old way" was ever a great business model. Guerinot explained:

When you look backwards, everyone thinks 'oh, gee, they had the great business model.' I guarantee, if you talk to anyone who was making music in the 60s, they would tell you they did not have a great business model. As you moved into the 70s, 80s and 90s... nobody thought it was a great. Everything looks great in the rear view mirror. And everybody, as you go forward, keeps saying 'oh we need the new music business model.' We might already be in the new music business model! This might be it!... And as a guy who's supposed to help Trent navigate and ultimately get his music to as many people as he can, and honor and respect the way that he does that, it's pretty great right now. I mean, it really is. It's pretty great.

Finally, if there was one theme that ran through the entire discussion, which came up over and over and over again, it was that what was most important to Reznor was finding the path that would hopefully be best for getting fans to enjoy the music. And, while he noted that he really relished the challenge of trying to think through business models and new opportunities, in the end, it was more important to him, personally, to focus on the music at this time. He admits that all the other stuff let him "flex a different muscle in my brain" for the past few years, but he wanted to try to focus on the music for now. He says that it was fun, and had a sense of "wow I can do that!" when stuff succeeded, but he also worried that "I'm really not the best guy at figuring that stuff out," (despite earlier admitting he was "high on arrogance" at his own ability to figure some of this stuff out). And as he got more and more focused on solving that business model riddle, it became more and more engaging for him -- but he worried that, since he became so focused on it, he almost became too focused on that new challenge, rather than on the music.

I found this part of our discussion really interesting (and it included a little tangent discussion about the energy that goes into dealing with trolls...), because he was more or less admitting that all of the new opportunities out there were too enticing, and he wanted to spend more time figuring them out, but that process alone was distracting. Interesting stuff.

Oh, and, as for the recent revelation that Reznor is working with Beats by Dre on a new project, Reznor revealed just a bit of information on that... mostly off the record, but if all goes according to plan, it sounds like it's going to be very, very interesting, and not at all what you're thinking it's about.

In the end, the overall story was pretty much what I expected. For this particular project, with these particular goals, Reznor (and the rest of the band) felt that this deal made sense -- a deal that they were able to negotiate with some leverage, as a licensing deal, where they retain the masters. They get to work with folks who are enthusiastic and different than the "old guard," while still having the ability to market on a massive scale. But none of that changes the excitement that they feel for some of the new stuff and new opportunities that are out there, and they see lots of reasons for bands to keep experimenting. In fact, they used that word over and over again -- that this new deal was also "an experiment" -- no different than the experiments they've done over the past six years with different ways to release music -- and they were upfront that it might fail. "I'll keep you posted," Reznor promised, noting that, "I may have a very different story a year from now." So, stay tuned...

Reader Comments

A big long interview to basically say "Yes, I signed a label deal, but I have a little more power because of my name"... but he pretty much admits that even with the power of the internet, the power of the NIN fanbase, he still can't get a new project the exposure it really needs without the labels to open the doors to other markets.

Re:

Maybe you should re-read it, especially Reznor's comments on DIY and what is most important - goals.

And the second important point, the labels HAVE CHANGED (some are still the same I am sure).

It is NOT _just_ because of his NIN fanbase that Reznor was able to negotiate a deal where he kept his masters. Likely he had other options, which he said he did, so he was not under the old way of "sign or you'll never grow in this forest."

Re: Re: "the overall story was pretty much what I expected."

Re: Re:

I appreciate that he gets to keep his masters, but then again, you understand that Reznor owned his own label (Nothing) for ages, and only through his own personal demons lost much of that the last time around. He has almost always had incredibly sweet heart deals for his work.

I also appreciate his comments on DIY, but in the end, all the DIY in the world isn't as powerful as the route he chose. His decision is way more telling than his words in the regard. He selected the tool that would do the most for him, and that tool was a record label.

The labels have changed to some degree, but in the end, they still are the big dogs, with the big access, the big markets, and the ability to take Trent's new project to places that his fan base and social networking would never take him.

Re:

All this tells us is that his particular implementation of the methodology is a failure. It tells us nothing about the overall merits of the non-label method, especially if you consider that we already have countless examples of artists that succeeded without the help of labels.

Re: Re: "the overall story was pretty much what I expected."

Skimming might still be too much of a challenge. Perhaps Mike could figure out a way to explain complex issues as a dot-to-dot picture. Perhaps color-by-number would work better. Or perhaps he should just stick to cartoons. His comments thus far bring this one to mind: http://dilbert.com/strips/comic/2010-09-16/

Re: Re: Re:

Re: "the overall story was pretty much what I expected."

Can I take this one?

Because it was the right move for the band, in their eyes.

Notice the difference between this deal and the "typical" deal:

1) the band keep the masters;
2) very little of the advanc eis going direct into the band's pocket - it's being invested into the video and production costs; and
3) it has a different method of business.

From the article:

I found this part of our discussion really interesting (and it included a little tangent discussion about the energy that goes into dealing with trolls...), because he was more or less admitting that all of the new opportunities out there were too enticing, and he wanted to spend more time figuring them out, but that process alone was distracting. Interesting stuff.

Re: Re:

" It tells us nothing about the overall merits of the non-label method, especially if you consider that we already have countless examples of artists that succeeded without the help of labels."

First off, success is a relative term. I suspect that any of the "successful" new model acts would all but chew off their right arms to have the type of success that Reznor has had, both as a label and as an "indie" artist.

That being said, what is more important is that Reznor was one of the first and one of the loudest to go the indie route, the online route. NIN had amazing websites when everyone else was still seemed to be using frontpage to make angelfire sites. The hype and the press and everything that went with Reznor, NIN, and the whole indie thing was intense. So when he signs a deal (any deal) with a label, you have to wonder.

Then again, the under current of all the "indie-ness" of Reznor is that he has spent most of his time in the past while working with his wife on this project, and in making music for movies and video games, both places where he gets paid every time the product is sold, viewed, etc. He has great skill in this area, and has apparently made quite a bit of money not being indie, but being, well, the guy getting paid every time someone pays an MPAA studio to see a movie. Nice work if you can get it, right?

Now he's back working with a label because for all that he can do online, he cannot easily reach a market that is not already his. It's perhaps the most damning thing about all of this, because it shows that there is no simple route to get the right music in front of the right people, except via the labels.

Reznor made the deal not just to get marketing help - it's to get access, to get into marketplaces his name and his reputation will not get him into. In his case, the label methodology should work out better, and a man with his experience is betting on it.

Re: "the overall story was pretty much what I expected."

There's no given formula for that, and because the market is over-saturated with music, it's even more difficult for bands to be successful, but it doesn't mean it can't be done.

The only problem is, you can tell when a band is only in it to get on the gravy train. Good bands do it for the art, and when they pay their dues they're more likely to gain success than the one hit wonders.

Re:

"...but he pretty much admits that even with the power of the internet, the power of the NIN fanbase, he still can't get a new project the exposure it really needs without the labels to open the doors to other markets."

Do you think that's a good thing? That you have to go through a major label to be able to get the exposure you want?

Re: Re: Re:

It depends on the label, not all labels have access to all markets. You have to find the right label/team for you, for your goals.

I highly doubt Reznor would have signed with Columbia if he wanted South Asian markets like India/South Korea/Thailand or other markets like Japan/China/Russia.

To reach those markets you'd go with a team focused on those markets.

If Trent decided he LOVED Bollywood, he'd team up with a group from that area, who's got the connections (not just says they have the connections) and who does the promotion (not just says they do the promotion).

Re: Re:

Sorry but there's no mention of a failure in TFA. It's explicit throughout that striking a specific deal for a specific artistic project, with a specific purpose that T. Reznor has confidence will be better served.

It effectivly and directly contradicts the spinning of going back "home" after a "failure". And he's explicit at considering this an experiment and not a done deal it will succeed.

It stresses one point I found has been often overlooked by this blog in the direct-to-fan models: it takes much time and attention from the artist, and it may divert from actually creating.

Does it mean backing can come only from major company ? No. But this is what they still may bring added value to. Along with a solid industry network he'll be leveraging.

The interesting thing is that at no point is "piracy" or "copyright" even mentionned in the approach or in him dealing with the record co. It's refreshing to see a professional approach well informed and win-win spirit on fantasies prevail over the usual control-freaking.

Re: Re: Re: Re:

Actually, I don't think the interview shows that he is worried about markets in a location sense, rather markets in a musical taste sense. The new stuff with his wife most certainly is not NIN, it is extremely far from it. If you are a NIN fan, you are not exactly going to love this stuff.

So his goal in signing a label deal is because his fan base and his ability in social media space does not extend to that group. I suspect that what he is actually saying is that outside of the "wired kids and 20 somethings", there is a big music market out there that doesn't go online for stuff. Maybe they don't use social media in the same way. Maybe they just don't have the time to spend hours to track down fan clubs and the latest chat room stuff.

Record labels have access to the markets he wants to deal with, so he signed a deal.

Re: Re: Re:

"It effectivly and directly contradicts the spinning of going back "home" after a "failure". And he's explicit at considering this an experiment and not a done deal it will succeed."

I don't think anyone is trying to spin "go back home after failure". His DIY style career did okay for him, much of the time seems to have been spent on writing and licensing out movie and video game music rather than producing albums, but that's okay. He made his money, perhaps not where the DIY type would think he did, but again, that's okay.

It's not "he failed so he went home" rather a rather straight admission that all the DIY he could manage couldn't do for him what a label deal could do at this point.

"It stresses one point I found has been often overlooked by this blog in the direct-to-fan models: it takes much time and attention from the artist, and it may divert from actually creating."

It's actually a very big deal that has been blown off here before. The usual comment is "you don't write songs 24 hours a day" and "you don't perform 24 hours per day". It's one of those things that comes from people who have never spent any time actually trying to do the work to understand what is involved.

The bigger term for it is opportunity cost, where time spent doing what you are not so good at is wasted compared to what time could be spent doing what you are good at. It's pretty much basic economic stuff, but one of those areas that doesn't seem to be much in vogue here.

Re: Re: Re: Re:

"It's not "he failed so he went home" rather a rather straight admission that all the DIY he could manage couldn't do for him what a label deal could do at this point."

This move can hardly be seen as moving out of DIY for his main Nine Inch Nails act. It's about lending that record's co. services for the specific project with a favorable deal.

T. Reznor's and the record co's approach looks quite inline with what I saw advocating here often: that the Major companies can find a renewed legitamicy through actually acting as professional enablers to the artists, instead of considering they own the artists and have an absolute control over distribution and promotion channels.

Re:

Labels as enablers not gatekeepers

It's funny how the critics of any of the new ways of doing things forget that one of the often talked about new ways would be big labels in a reduced role of an enabler. Which is exactly what is happening here. Reznor and the band retain their masters and creative control and the label handles the day to day running of marketing and distribution and invests in the product.

What labels do is a mix of being an investor in, and contractor of, a band. Part of what they used to do as a contractor was distribution and they had a strangle hold on the market because of it. That one thing allowed them to distort the value of what they actually offered because they had a monopoly on being able to effectively offer it.

Those days are done and with out that gate to keep labels are left with the actual value of what they have to offer. It gives artist the power to actually negotiate because they have the power to go their own way.

I see people saying that Reznor taking this root shows the new models are too much hard work for artist or that Reznor didn't have the balls to make it on his own. It's stupid, yes doing everything on your own is harder work, we are all well aware of this so it shouldn't be a surprise that some one who can get terms they favour with a contractor who can do that work for them for a price they are happy with take it.

"Why not just put together his own team/label"? Because he doesn't have to do all that work or hold all that responsibility. He has been able to work out a deal with the label to have them take care of all that with out loss of control over his work. What a god damn shock it is that some one might want to pay people to do work or assume risk for them!

I'll put it like this, I'm in a band, I used to do a bit of promotion. I got started in promotion because I was in a new band at the time and we decided to put our first gig on ourselves, rent out a bigger venue than would put us on, pack the bill with acts we knew would pull and plop ourselves down in the middle of it. It was hard work and we felt we where going to lose money but seemed work it for a one off. It went amazingly well, packed out the venue our first gig was a hit and we made money! So we kept putting on gigs, in fact while I went to uni one of the band members built a promotion company that did very well for a while. But we didn't promote all our gigs and in the end the band split up because the guy with the promotion company decided to put his efforts in to that over the band.

My point? If I want a gig for my band I have the skills (and to some extent the contacts) to do it my self. What I don't have however is the time, will, and money I'm willing to lose that I'd need in order to do that very often if at all these days.

So what do I do when I want a gig for my band? I work with promoters and agree to a deal in which they take the risk/effort of investing and running a gig and we just turn up play and try and draw people in. The better known for drawing a crowd my band is the better deals I can look to negotiate with promoters.

See the point I'm making? Just because I can do something does not mean I have to. There is nothing wrong with working with other people and in some way paying them to do something I could do but for one reason or another don't want to.

Re: Labels as enablers not gatekeepers

"...it shouldn't be a surprise that some one who can get terms they favour with a contractor who can do that work for them for a price they are happy with take it."

This is a good analogy. One thing that surprised me in this article, however, was Reznor's assertion that his Columbia Records team was "lean and mean." The record labels have a serious PR problem created by many recent stories of artist exploitation and record label executive bloat at the top. So using the analogy of the contractor, one has to ask the question: 'Why would he sign with a contractor that has (at least in the past) proved itself to be exploitive?" It's like watching your neighbor's kitchen renovation contractor go over budget, ask for more more, and screw you over with crappy materials - and then hiring them and saying "Well, they are much changed and they really do have some good carpenters working for them."

You have to ask: Has the record label culture really changed? And why is the label not hiring some whiz bang PR people to make hay from this announcement, clarify the deal, and show the industry how progressive they now are (and how "lean and mean")? Spotify and Pandora have done a better job with their artist perception issues lately, but I see little coming from the labels on positive spin for how they are now the best place for artists to go.

When artists like Amanda Palmer and Macklemore can create large international fan bases and live performance tours through social media and successfully launch their CDs with a team of non-record-label business people helping them, it seems hard to explain why this cannot be done outside a label if you are an already established artist. This is just a business problem of distribution and diversification of audience that could (theoretically, at least) be addressed by hiring smart business people with music industry experience - who are not affiliated with tainted brands like record labels.

To me, the "how to grow and diversify" the customer base decision is easier for existing talent like Reznor - has more options, he has an existing revenue stream. His actions outrage other indie artists and confuse them because they don't know who to trust. They look to independent thinkers like Reznor as role modesl: should they be seeking a label deal or not? Are labels trustworthy actors or not? Are they contractors simply to be hired, or are they bad actors who want to lock artists into exploitive deals?

Maybe the labels are changing, maybe they are not. I think it probably is different when you work with someone you know and trust, as seems to have been the key for Reznor in his decision. I still think for the indie artist, it's very confusing to know what to work toward, and the answer right now is still: Do It Yourself (Or Do It With A Team You Build Yourself). And it's not easy, it takes time, and it takes time away from creating your music, but it's the only way to have a chance at making a living as a musician. And if a label wants to sign you as a relatively unknown artist, be careful, be very careful.

I think he is being delusional here if he thinks this is more than a side project. The competitive artists in the similar genre he likens himself to, happen to be bar high above (including NIN) to what he has so far delivered,. He doesn't want this to be limited to NIN fans alone, but the reality is NIN is established in so many countries that it is ridiculous to separate that from the NIN/TR brand. It seems this band only appeals to a small percentage of NIN fans anyways, and I cannot fathom any success with this project without the establishment of NIN/TR.

If he believes so much in the future of DIY then why undermine his own label, by removing himself from the limitless resources he has over thousands of other indie artists, and implementing his own marketing team. If this is amazing I'm worried to what he has left to bring to NIN creatively and as an independent band. Is he going to sign NIN to a major label too? This has only disparaged a number of listeners into the idea that back pedalling into a major label works now as long as you're the .001% of acts out there who might get his way (or so he thinks Columbia isn't in it for the small group of NIN fans, eyeroll) and a line of credit. This is not a business model for new artists, this is a business model for established artists and a very limited number at that. Columbia wanting to experiment with various indie models sounds like a mess in the making. That's why some indie labels are thriving because they are successful in finding the right markets for the right music. Columbia isn't going to do anything significantly different because it's going to be sold back to NIN fans as the prime market anyways.